Miners help FTSE to edge higher, BHP slips

LONDON, Nov 26 (Reuters) - Britain's top share index edged
higher in early trade on Thursday, with a rally in basic
resources stocks on the back of stronger metals prices
supporting the broader stock market.

The UK mining index rose 1 percent, the top
sectoral gainer, after nickel prices rose sharply on supply
concerns. Prices of other industrial metals such as copper and
aluminium were also strong.

"A lack of major market moving news and below average
trading volume due to U.S. markets being closed for Thanksgiving
today is favouring higher shares ... the overall trend is
clearly pointed to the upside," Markus Huber, senior analyst at
Peregrine & Black, said.

However, BHP Billiton underperformed the market. Its
shares fell 2.8 percent, the top decliner in the FTSE 100 index,
following bearish comments from heavyweights JP Morgan and
Societe Generale.

JP Morgan cut its rating on the stock to "underweight" from
"neutral" and said it was now factoring a 50 percent reduction
in its dividend due to a further downside risk to copper prices.

"We believe the Samarco tailings dam failure will prove to
be the straw that breaks the camel's back on BHP's progressive
dividend," JP Morgan analysts said, referring to the bursting of
a tailings dam at Brazilian miner Samarco, an iron ore joint
venture between Vale SA and BHP Billiton, earlier this month.

Societe Generale also cut its target price for the stock to
915 pence from 1,050 pence.

The UK mining index has slumped more than 40 percent so far
this year on concerns about metals demand in top consumer China
and a firmer dollar, putting pressure on metals prices.

National Grid and SABMiller fell 1.8 percent
and 0.2 percent respectively as their shares traded without the
entitlement of their latest dividend payouts.

Among mid-cap companies, Paypoint slumped more than
10 percent after it reported a 5 percent fall in its operating
profits in the April-September period.
(Reporting by Atul Prakash; Editing by Hugh Lawson)